Bitcoin(redirected from Bit coin)
Also found in: Dictionary.
Bitcoin:see virtual currencyvirtual currency,
a means of payment that is electronically created and stored, more specifically an unregulated electronic medium of exchange that operates like a currency but is created and controlled by computer software; also called digital currency.
..... Click the link for more information. .
BitcoinA peer-to-peer digital currency system introduced by Satoshi Nakamoto in January 2009. Nakamoto's true identity was always undisclosed; however, articles attributed to him were written in flawless English. In 2016, Australian computer scientist Craig Wright surfaced as the Bitcoin inventor.
Bitcoin is a "virtual currency" that is not sanctioned by any government. It is also known as a "cryptocurrency," because transactions are encrypted with public key cryptography. There are thousands of companies selling products as well as people willing to work in exchange for Bitcoins.
Bitcoins can be divided into minuscule fractions of a single coin (up to eight decimal places), and every Bitcoin fraction has a unique address for identification. They can also be bought and sold for real money at a Bitcoin exchange.
No Third Party
Bitcoin eliminates the trusted financial institution as a go-between, and transactions cannot be reversed. Precisely because Bitcoin operates outside a central banking system, and there is no trusted third party, it is often considered a "digital Ponzi scheme."
The value of a Bitcoin (BTC) fluctuates wildly. For example, on January 1, 2013, one Bitcoin was worth USD $13.38. It swung up and down to a top of $1,137 on November 29, 2013 only to drop to less than half that amount within a week before climbing back. By September 2015, a Bitcoin was worth around USD $230, but by September 2016 more than double that amount.
No Central Repository
There is no central repository. The Bitcoins and the transactions are stored in each user's digital wallet, and every transaction is published to the Bitcoin network with encrypted source and destination addresses, making them untraceable.
Bitcoins Are Mined!
The strangest thing about Bitcoins is the way they come into existence. Bitcoin "miners" are computers that maintain the integrity of the network by adding past transactions to the "blockchain," a shared and continuously growing distributed database of transactions. In so doing, their accounts receive transaction fees, and after an extraordinary amount of computation are rewarded new Bitcoins. The Bitcoin algorithm ensures that a uniform number of coins are generated each day.
By September, 2015, there were approximately 14.6 million Bitcoins in existence; however, the total is capped at 21 million, which is expected by 2140. The Bitcoin algorithm makes it more difficult to mine coins in each subsequent year. For details, visit http://en.bitcoin.it.
Fed Printing vs. Bitcoin Generation
When people argue that Bitcoins are no less valid than the U.S. dollar, they are missing an important difference. Bitcoins have nothing to back them up but the faith of the people using them. The United States has the IRS, the Army, the Navy and a raft of other federal agencies to ensure people contribute to the system by paying taxes.
Traction - Then Hacking
In late 2010, Bitcoins were becoming popular in the open source and underground communities. By mid-2011, there was an attack on the Japan-based Mt. Gox Bitcoin exchange, and someone claimed a hacker extracted 25,000 Bitcoins from his personal computer worth nearly $500,000. In early 2014, Mt. Gox filed for bankruptcy, because it was revealed that the exchange concealed the loss of hundreds of thousands of Bitcoins via hacking.
Legal or Not?
In 2013, Germany recognized Bitcoins as a financial instrument, and the U.S. Department of Justice said Bitcoins were a valid means of exchange even though members of Congress had tried to invalidate them two years earlier. As time passes, countries are expected to announce their official acceptance or rejection of this currency. For more information, visit www.bitcoin.org, www.bitcoincharts.com and www.blockchain.info. See blockchain, Silk Road, Web payments service and digital wallet.